We saw USD/JPY trading higher again on Monday, the expected consolidation of Friday`s rally did not materialize. ("USD/JPY crawled higher towards key horizontal resistance in the 102.10 area. The pair is heavily overbought in the short term, from a technical perspective we would expect some form of consolidative action kicking in here today. It is likely that USD/JPY spends most of the time on Monday trading sideways/ slightly lower as traders take some profits off the table after the strong advance from 101.44. Following that expected technical correction we could see another leg higher tomorrow. Key support in the short term is 101.80, key resistance 102.10 yen.")
The Japanese yen remained very weak on Monday; USD/JPY continued its advance without looking back. The neckline of the inverse head and shoulders pattern was surpassed on Monday – this is a bullish sign. The target of that bottoming formation is in the 102.80:103.00 area. Traders should prefer long positions into technical corrections in the pair – the short term trend is clearly up. This will very likely not change until we get the non-farm payroll figures from the US on Friday. Key support for today is 102.15 and 102.00; resistance is the 102.50 level.
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